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« Portfolio Update 20 November 2008 | Main | Hecla Mining Company: Is the free fall over? »

Endeavour Revenues Up 38% from Q3, 2007!

We will start with a quote from Bradford Cooke, Chairman and CEO:

"However, the dominant theme in the Fourth Quarter, 2008 will be the ongoing global financial crisis, which has negatively impacted not only the silver price near-term but every company, commodity and market world-wide. Management therefore decided to rein in the scheduled production growth in Q4, 2008 and for the foreseeable future because the spot silver price should rebound in 2009 so there is no sense in pushing production growth at this time. Endeavour will be in a good position to capitalize on the next upward move in the silver price by resuming its silver production growth at that time."

One of the advantages of having cash in the bank as Endeavour has is that it allows for such decisions to be made in terms of taking the foot of the production pedal when silver prices are not as attractive as they should be. The highlights of this update are listed as follows:

Silver production was 626,990 oz, up 9% over Q3, 2007 and up 21% from Q2, 2008, and totals 1,648,736 oz for the first 9 months of 2008.

Mineral sales were $10.6 million, up 38% over Q3, 2007 and up 5% from Q2, 2008, and total $31.4 million for the first 9 months of 2008.

Cost of sales was $7.6 million, up 11% over Q3, 2007 and up 5% from Q2, 2008, and total $20.1 million for the first 9 months of 2008.

Mine operating earnings were $0.4 million, up from the $0.8 million loss in Q3, 2007 but down from the $1.9 million gain in Q2, 2008 and total $5.0 million for the first 9 months of 2008.

Cash costs were $9.52 per oz, down 11% from Q3, 2007 and down incrementally from Q2, 2008 in spite of the strengthening Mexican peso and sharply higher smelting charges.

Working capital at the end of Q3, 2008 was $10.9 million including $5.6 million in cash, cash equivalents, and marketable securities - and no debt.

Consolidated mine output, plant throughput, silver production, grade and recovery were all higher compared to Q2, 2008 and Q3, 2007, excepting a minor drop in silver grade compared to 2007.

Mine output at the Guanajuato Mines in Guanajuato continued to ramp up during the 3rd quarter, averaging 396 tonnes per day in Q3, 2008, up 24% from Q3, 2007 and up 55% over Q2, 2008.

Exploration drilling extended three new high grade silver discoveries in the San Pedro area near the Guanacevi Mines in Durango and identified four new mineralized zones at Guanajuato.

We are pleased to see that the cash costs of silver production are coming down, as this should serve us well going forward when silver prices move to higher ground. Another point to note is that the Executives have taken a 10% pay cut, there are not too many producers that we are aware of that have elected to take a pay cut so it is generous of them to do so. There is also a 10% labour reduction being implemented, another move which bodes well for getting costs even lower.

As long term readers will know Endeavour forms a large part of our core position which we expect to do extremely well once silver gets back into the saddle, until then we will sit tight and keep a firm hold of the stocks in our core portfolio.

To read this news release in full, please click here.

Endeavour Silver Corporation has a Market Capitalisation of $51.49 million with 49.04 million shares outstanding, a 52 week high of $4.69 and 52 week low of $0.71, closed yesterday at $1.05 and trades as: EDR: TSX, EJD: DBFrankfurt, EXK: AMEX)

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